Polytex (4429-TW), the leading manufacturer of functional moisture-permeable waterproof fabrics in Taiwan, recently held a pre-listing corporate briefing on October 14th. The company announced that it would officially list at NT$40 per share, becoming the first specialized processor of moisture-permeable and waterproof fabric in Taiwan. This milestone marks a significant step forward for the company as it expands its presence in the high-performance textile market.
In the first half of this year, Polytex saw a strong performance driven by increased demand for high-margin products such as protective clothing, apparel, and medical materials. The net profit after tax reached NT$2.89 per share, nearly matching the full-year earnings. According to the company’s management, the second half of the year is expected to remain robust, with government subsidies contributing to an estimated full-year net profit of NT$5 per share.
With a paid-in capital of NT$244 million, Polytex reported revenue of NT$517 million in the first half of the year, along with a net profit after tax of NT$70.61 million, or NT$2.89 per share. This represents a record high for the company, with a gross margin of 22%. Even during the off-season, monthly revenue remained strong, reaching NT$71.36 million in August—up 51.61% year-over-year. From January to August, total revenue reached NT$644 million, reflecting a 19.23% annual increase.
Founded in 1999, Poly Spinning was the first company in Taiwan to develop wet micro-porous coating and laminating technologies. Its wet-coating technology is industry-leading, with moisture permeability and waterproof performance comparable to Japan’s Toray Entrant GII and even matching the processing qualities and soft touch of Gore-Tex. The company primarily serves top international outdoor brands, including The North Face, Columbia, Helly Hansen, Patagonia, and Jack Wolfskin.
Currently, ECFA-related stocks are gaining traction in the market. As a key player in the ECFA sector, Polytex benefits from both regional trade agreements and the appreciation of the Japanese yen, which boosts demand for Japanese moisture-permeable and water-repellent processing. This has made the company increasingly attractive, especially in the second half of the year. After years of quiet growth, the textile industry is now entering a decade of strong expansion.
Analysts predict that Polytex could see growth of 30% to 50% over the next three years. At its current P/E ratio, the stock is considered undervalued, and there is potential for further listing activity. With favorable market conditions, the company may soon experience a wave of investor interest.
Recent data from the Japan Chemical Fiber Association (JCFA) shows that Japan’s chemical fiber output fell sharply in 2009, marking the lowest level in history. Total production declined by 6%, with nylon filament, polyester, and acrylic fiber output dropping to 68.20 million tons. Nylon and polyester production fell by 34% and 33%, respectively, compared to the previous year.
Despite this decline, global demand for chemical fibers is expected to grow. The JCFA predicts that consumption will reach 53.95 million tons by 2015, up 24% from 43.51 million tons in 2008. China and India are expected to lead the growth, with the highest increases worldwide. This trend bodes well for companies like Polytex, which are positioned to benefit from rising global demand.
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